Does an Aversion to Risk-Taking Hold Back Women Entrepreneurs?

By Kelly Spors

The New York Times over the weekend had an interesting essay by Hannah Seligson, a twenty-something free-lance journalist who writes about her “rocky entrance” into the working world. Her observation: Women often excel and outperform men in the classroom, but they’re ill-prepared for the realities of what it takes to succeed at work. Many women, she says, are too perfectionist and hence averse to risk-taking, asking for raises, being told “no,” bragging about themselves, and other activities men seem more comfortable with.

She writes: “I used to think that perfection was the pathway to success. Not so, according to women I have interviewed who have reached the apex of their professions. Rather, it can lead to paralysis. Women, I have found, can let perfectionism stop them from speaking up or taking risks. For men, especially if they are thick-skinned, the thought of someone telling them ‘no’ tends not to be viewed as earth-shattering.”

If her assessment is true, it seems these disadvantages could also affect women’s willingness to jump into entrepreneurship. Starting a new business certainly requires great amount of personal and financial risk, and it also requires the ability to handle repeated rejection, be aggressive and thick-skinned and be self-promotional — all skills Ms. Seligson says many women struggle with. (On the flipside, some women view femininity as a great advantage to female entrepreneurs, as we wrote a few months ago.)

I wonder if Ms. Seligson might have a point. Statistics suggest women are very under-represented in entrepreneurship. The latest census tally from 2002 – admittedly, not very recent — shows women owned only 28% of all U.S. businesses. Even more sobering, women-owned firms accounted for only 4.2% of total U.S. receipts, the Census Bureau found.

Could it be they’re less willing to take the risks men take? Or are there other factors at play?
Photo: Getty Images

Comments (4 of 4)

There's one big obvious thing that hasn't been mentioned here. Many women don't enter into entrepreneurship because their family life (aka having babies) takes priority. This isn't too say that you can't have kids and be an entrepreneur. But women want to have children, simple as that. 12 hour works days don't cater to raising children as the primary caregiver, simple as that. There are ways to get creative, however, and not have to work 12 hour days to achieve mega success. This is the best resource I've seen for women... http://www.johnassaraf.com/challenge.php?s=hiac2008

3:30 pm September 2, 2008

ProbablyBiased wrote :

I am an investment professional so I assess risk for a living. Risk has a BIG impact on the ultimate success or failure that one sees in life. I have observed the most successful are often not the smartest, smoothest, virtuous, or most experienced. They are the ones that take calculated risk and, due to what amounts to more repetitive luck than skill in my opinion (given the market's efficiencies, the risk is usually priced in), one can win big or lose big. In any game of dice or cards, statistically speaking, there can be many in a large population that hit their numbers over and over by pure chance. However, it is not possible to hit your numbers if you never play. As I woman, I have observed less risk-taking by my fellow businesswomen, but this is changing and will continue to change. In my opinion, some risk-taking is a self-centered endeavor. The entrepreuner who risks the family nest egg and/or takes on extraordinary liabilities in enchange for personal gain and glory but loses the family along the way. The investment advisor that risks Other People's Money and limits his/her own liability and risk such that it is a tails I win, heads I win situation. Now I know I will get flak for this, but as a group, I think men are more self-centered than woman and that lends to more risk-taking. It's harder to take risk when you have a baby on your hip.

3:18 pm September 2, 2008

Numbers Princess wrote :

Uhmmm...

28% seems pretty good...

What was the number 20 years ago?

Slow and steady I say...

Women are coming along...

3:03 pm September 2, 2008

SB wrote :

Though I'm male, I am myself risk-averse. I have excelled in the classroom, but in professional life, am not even close to where many of my fellow students who were often poorer academic performers.

I too want things the right way, want to say things the right way, and have them said to me in the right way, find it hard to face rejections, can get embarassed easily, and have a very thin skin that's easily depressed or offended. Oh yes, and I find it disgusting to brag about myself..

The result, I'm very risk-averse, and do not see myself surviving any business I might get into.

And need i mention i'm straight, just in case, people form any theories.

So this argument about women entrepreneurs is something that's gender-independent. Anyone who has those characteristics (and there are many women who don't), will find it hard to survive in business. Statistically, as women have thinner skins than men and want things said and done the right way, and would rather avoid a situation than risk a rejection, they will perform poorer, as a group, in business.